At the 15th annual Burnham-Moores Real Estate Conference in San Diego, Fannie Mae CEO Michael Williams said he believes that, while the California housing market will continue to decline this year, the San Diego County market will improve and see price increases.   Williams said, "Looking ahead, we expect further declines in housing prices this year---- albeit they will be modest ---- for both California and the rest of the country before we start to move forward.  However, we believe our host city of San Diego will be one of the bright spots, with prices growing moderately over the course of the year."  In a later conversation with reporters, Williams and Fannie Mae Chief Economist Doug Duncan said San Diego has not been hurt as badly as other markets.  While their predictions are encouraging, the foreclosure rate is expected to increase, and foreclosures usually pull down housing prices. 

Source: “HOUSING: Fannie Mae chief optimistic about region”